Before the trading day began Tuesday, spot prices for gold were trending sharply higher. By 10AM gold prices has reached $855 an ounce, up $25 dollars in two hours. Wall Street has already factored in the potential damage an Obama Presidency would have on the stock market. Wall Steet is always prepared for the movements in the price of stocks, bonds and commodities.

Traders did not take into consideration how the Average Joe across the globe would respond to plans for a whole new bundle of worthless paperhanging of the US Dollar.

Gold prices had been forecast to drop down to as low as $775 dollars as recently as last week.

Apparently, the rules of this new market is joined to the average consumer. Many investors had planned to sell off as much as 500% in capital gains they have enjoyed once the new president has settled into the Oval Office and life returned to normal in the USA. The American people have apparently decided to hang onto their investments in gold and in many cases even increase their investment in gold.

What’s funny is that we no longer see all those on this site who regularly scoffed at and criticized any reference to gold over the past 5-10 years. Not so bold in their aggressive defense of the stock market and the American dollar any more, I guess................

A big thanks to the several posters here who urged me to get into gold.

I sold all my stocks on Nov. 7th and put them into a Fidelity Gold Fund (FSAGX) and it's gone up about 45% in those two or so months.

I realize that no one knows where gold's going to go, but is there any rule of thumb as to when I should bail on FSAGX if it starts going south? Just so I don't realize years later “If I'd only sold when X happened/we got to X point, like everyone says...”

Apparently, the rules of this new market is joined to the average consumer. Many investors had planned to sell off as much as 500% in capital gains they have enjoyed once the new president has settled into the Oval Office and life returned to normal in the USA. The American people have apparently decided to hang onto their investments in gold and in many cases even increase their investment in gold.

What was really said above, was the American investor, has no confidence in the new President....

You may want to watch the Amex Gold Bugs Index, a basket of 16 gold/silver miners. Currently at 281.51. Looks like if you bought on Nov.7, you got a great entry as $HUI (Amex GBI) was at 208 or so on that day. Overhead resistance is at 310ish, a clean break up through there and it’s clear sailing to 350-360. No harm in trading in and out of the gold miners, I don’t think we’re at a point where they will run away to the upside YET. Perhaps later this year.

I realize that no one knows where gold’s going to go, but is there any rule of thumb as to when I should bail on FSAGX if it starts going south? Just so I don’t realize years later If I’d only sold when X happened/we got to X point, like everyone says...

Rule of thumb: when the price of an ounce of gold exceeds the Dow Jones Industrial Average, start selling the gold.

I believe that gold will triple at least over the next 2-3 years and Zero won’t be able to do much about it. He will be big time po’d that people are stashing their wealth there but he can’t trash gold by releasing the gold at Ft Knox. I just don’t think there is enough of it to really depress the price that much. Maybe initially but even if he cleaned Ft Knox out as the gummint sells the last bit the price will spring up unbelievably. At that point he will have to make it illegal to own gold (like FDR did under the same circumstances) and Zero will have to buy it back at face value. 50 dollars an ounce. You need to be out by then or willing to hold 40 years until it is legal again or risk losing everything

You don't solve a problem by giving those who caused it even more power. Yet, that's just what we did.

Bush's greatest legacy may not be his war against radical Islam, but his failure to embrace free-market reforms and to allow Paulson, Bernnake, and the Democrat Congress to install big government solutions at the 11th hour.

I watch what’s on sale. I buy coins because it makes my hubby feel better. He says we can’t spend bullion. I would be okay with buying it, because the coins are more expensive, but he likes the coins.

Buy what is .999 silver and you can’t go wrong. This is our third shipment. We are buying one a month. I figure it’s going to buy us food in the Obama administration or books for my girl’s college. Either way, it doesn’t go bad.

FReepers are wonderful!

16
posted on 01/20/2009 8:24:12 AM PST
by netmilsmom
(Psalm 109:8 - Let his days be few; and let another take his office)

So let me ask, was this 401K money?
We own five stocks. Two Disney, one Merick, one GM (snicker) and Consumer’s Energy. All of our other money is in 401K stocks. Do you know if we can move that to Gold?

17
posted on 01/20/2009 8:27:19 AM PST
by netmilsmom
(Psalm 109:8 - Let his days be few; and let another take his office)

I’m not dispensing financial advice; but I will tell you what I do. The FSAGX owns mining stocks, and less than 10% bullion (per latest figures from the fund).

I own the ETF’s GLD and SLV (Gold and Silver ETF’s); and sell covered calls against them (your broker will make you fill out and apply for the privelege via an extra form, but with any investing experience at all, you’ll likely be approved).

Friday was options expiration. Therefore, I fully earned the premium of last month’s January covered calls, and now, this morning I was able to sell new February covered calls against my positons. For example: SLV was trading at about $11.14 per share (corresponding with silver’s price per ounce); The “in the money” February $11.00 calls were trading at about $0.40 each (x 100 share blocks of SLV = $40.00 premium received per call contract, less commissions).

End result: For every $1,115.00 invested in SLV, I received nearly $40.00, or 3.5% FOR THE MONTH; or an annualized return of over 40%!!!

No worries over whether the CEO of what I am investing in turns out to be Dennis Kozlowski or Ken Lay. Just ask the widows and orphans whose inheritance were large blocks of GM, Ford, or even General Electric.

Can the commodity prices crash? Yes; but unlike common stock, they will never be worth $0. In the meantime, the return I can get by selling covered calls, will keep me at a net positive even in the event the commodities market turns against me.

Also, if I do happen to get “called out” and have my shares sold out from under me, the commission on the sale is $7 and the commission my immediate re-purchase at a similar price point is $7...AND ! I can re-sell more covered calls for the same expiration month.

19
posted on 01/20/2009 8:30:38 AM PST
by Reagan80
("Government is not the solution to our problem, Government IS the problem." -RR; 1980 Inaugural)

Jan. 20 (Bloomberg) -- The pound dropped to a record low versus the yen and the weakest level since 2002 against the dollar on concern the government will have to rescue more banks as the economy slips into its worst recession since World War II.

Jim Rogers, chairman of Singapore-based Rogers Holdings, said the U.K. is finished and investors should sell the currency. Commonwealth Bank of Australia said there was a high risk of a cut to the countrys credit rating outlook and lowered its pound forecast. Prime Minister Gordon Brown authorized a 100 billion pound ($142 billion) bailout for banks.

I would urge you to sell any sterling you might have, said Rogers. Its finished. I hate to say it, but I would not put any money in the U.K. Rogers correctly predicted the start of the commodities rally in 1999.

Sort of. It was an old 401k that I rolled into an IRA when I left that job.

I'd guess if that's your situation too, you could to that. I just have it all in an Ameritrade account. I had it spread around a little in different stocks, but with Obama coming in, I didn't feel good about Halliburton, Exxon Mobile, Northrop etc.

I just don't want to commit to anything at the moment, until I get a better feel of what's going to happen and figured gold could be a good hedge.

Bush allowed his administration to be so villified that the a new term, BDS (Bush Derangement Syndrome) entered the lexicon. By being such a poor commicator, he allowed the leftists to destroy him. By not choosing a VP that would/could run for election on his/her own be screwed the Republican party. With so many people hating this man and his administration, they elected a marxist.

Which brings us to the net result of all of this: President Obama. That is Bush’s legacy - President Obama.

I'm not a professional investor, but I would be very cautious about getting into commodities at this stage of the game.

The last 10-15 years have seen a series of bubbles in various sectors. First it was growth stocks, then value stocks, then residential real estate, then oil, then commercial real estate. Are commodities the next "bubble" we're facing?

I've been advocating gold, but I heard Ben Stein say yesterday that this expansion of the money supply is an appropriate response to deflation. I was skeptical, but as evidence for his theory, he cited the fact that gold has not skyrocketed, as it would if inflation was widely feared.

Boy, I sure hope so hadacleonce. Now that I've found a place to buy golden US Eagles, I'm going to double down when prices drop below $775 an ounce. Dollar cost averaging my earlier purchases still triples my investments.

I've read all the posts about this being a phoney PM market or bubble. I just can't see why US paper money has much value at all. If the US Dollar no longer is the standard of international trade we are screwed.

You got it. When gold has risen to, say $3000, and the Dow has dropped to, say $3000, then the paths will have crossed, and you may consider steeling if there aren’t any obvious signs to the contrary (like a crater in Manhattan, or whatever.)

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